Starting an LLC: Where to begin?

Can I just put my LLC on hold since the business is strictly seasonal?
Hey there.

Robin Cook4 said:Can I just put my LLC on hold since the business is strictly seasonal?
Hey there.

Actually, you can't just put an LLC into a "dormant" mode; even if you aren't actively trading, you still have to deal with annual franchise taxes, various Chamber of Commerce fees, bank service charges, and all those other administrative overheads.
At the end of the year, you simply file your tax return and pay whatever is due on your profits, and that should be that.

hiddenpanther56 said:Actually, you can't just put an LLC into a "dormant" mode; even if you aren't actively trading, you still have to deal with annual franchise taxes, various Chamber of Commerce fees, bank service charges, and all those other administrative overheads.
At the end of the year, you simply file your tax return and pay whatever is due on your profits, and that should be that.

Look, it is possible to ask the city or local municipality for a tax waiver if you aren't operating (though that goes out the window if you did any business at all during the year). Same deal with the Chamber of Commerce, and certain banks won't hit you with service fees if there's zero activity in the account.
None of those loopholes apply to seasonal businesses; plenty of people operate on a strictly "seasonal" basis—especially given how things are looking lately.

I need some help here: what are the specific requirements for opening (exclusively) a botanical apothecary?

hey, can someone tell me if the IRS asks for proof of who's handling the bookkeeping when you're setting up an LLC?
thanks!

So, if I go ahead and set up an LLC, can I just hire myself out for part-time hours? Like, I’d be the founder, the CEO, and the only employee all rolled into one. Is that even a thing?
Thanks!

Charles Howard74 said:So, if I go ahead and set up an LLC, can I just hire myself out for part-time hours? Like, I’d be the founder, the CEO, and the only employee all rolled into one. Is that even a thing?
Thanks!

You can, but as far as I know, you'll still have to pay payroll taxes based on full-time earnings unless you're already covered under another plan...

We’ve officially filed the paperwork to expand our LLC's business activities and submitted the application to the Secretary of State. I was wondering, though, when exactly can we actually start operating under those new categories if there aren't any specific regulatory hurdles to clear first? Is it possible to just dive right in, or am I stuck waiting around until the Secretary of State finally processes the filing and sends back the official decision?

Carol Ward3 said:We’ve officially filed the paperwork to expand our LLC's business activities and submitted the application to the Secretary of State. I was wondering, though, when exactly can we actually start operating under those new categories if there aren't any specific regulatory hurdles to clear first? Is it possible to just dive right in, or am I stuck waiting around until the Secretary of State finally processes the filing and sends back the official decision?

You can start as soon as you submit the application.

Kimberly Harris6 said:You can start as soon as you submit the application.

Thanks, I figured that might be the case, but I suppose one can never be too careful.😉

Robin Cook4 said:hey, can someone tell me if the IRS asks for proof of who's handling the bookkeeping when you're setting up an LLC?
thanks!

When you're registering a business, the IRS usually wants to see a service agreement with your accountant (alongside things like your lease agreement or Social Security filings).

You don't strictly need a formal contract with an accounting firm since you can handle the books yourself if you have the patience for it. However, if you're already working with a pro, just attach the contract or even just provide your accountant's phone number.

Thomas Ortiz3 said:By the way, what kind of revenue are you projecting? Are you expecting high input costs with sales tax (buying the campers, etc.)? I ask because you need to decide if staying in the sales tax system actually makes sense for you. If your revenue stays under $50,000, you might not be required to collect it, but being registered means you'd charge 7% less on your invoices while getting that tax back on your own purchases... which matters more than people think.
You could probably handle the books yourself, provided you actually know how to navigate annual reports and everything else. Not sure if it's worth the headache...

Based on what you wrote, it's a bit unclear. An LLC doesn't pay "salaries" or "taxes" to itself; those go to the individual employee. Since an LLC is a separate legal entity, you're clearly talking about a staff member (who would obviously need valid work authorization). You aren't strictly required to pay a traditional salary, but you definitely have to cover payroll taxes unless they are being handled under some other arrangement...

I was just scrolling through this thread and now I'm a little stuck. If someone owns the business, acts as the founder of an LLC, and isn't working anywhere else, can they just pay themselves a net salary plus all the standard withholdings and taxes? Or is it actually possible, like you guys are suggesting, to not pay out a net salary at all while still keeping up with the tax payments?
I know a few business partners dealing with some serious collection issues right now, and they're struggling with cash flow. This could be a lifesaver for them in the short term, helping them stay afloat until "this whole economic mess settles down"...

Not trying to parrot anyone here...

Henry Edwards33 said:🤣

Look, you can try to be selfless, but at the end of the day, an employee works for a paycheck. It doesn't matter if you're the founder or just a staffer—nobody does this for the fun of it. If there’s no salary being paid, they’re working under the table, because let's face it, nobody works for free. Just keep that in mind. 😉

Sure, you can decide to take zero net pay as a CEO, but don't act shocked when the IRS comes knocking and asks for proof of how you actually pay your rent.
During my last audit—shout out to the inspector, she was actually great—she told me exactly that. An employee works for money; if there's no recorded salary, they're working for something else, and it's my job to figure out what that "something" is. 😉

Henry Edwards33 said:Not trying to parrot anyone here...

Sure, you can decide to take zero net pay as a CEO, but don't act shocked when the IRS comes knocking and asks for proof of how you actually pay your rent.
During my last audit—shout out to the inspector, she was actually great—she told me exactly that. An employee works for money; if there's no recorded salary, they're working for something else, and it's my job to figure out what that "something" is. 😉

And honestly, it makes perfect sense. It's the same logic applied to small business owners who supposedly "live off their revenue"... a concept that seems to escape a lot of people.

Hey there,
I’m just dropping in for the first time to say hi and ask a few things.
I’ve been thinking about finally pulling the trigger and opening my own bookkeeping firm—it’s a dream of mine—but honestly, I’m feeling a little lost on where to actually start.
Has anyone here already taken the plunge? If so, would you mind walking me through the ropes? I'm trying to wrap my head around the initial steps, what kind of startup costs I should be bracing for, and all that good stuff.

Thanks so much in advance,

Hey there!

I’ve got a quick question for you guys. I recently heard that when you're setting up an LLC here in the States, you don't actually have to put down that initial $20,000 startup deposit anymore—is that true? $0.00Is that actually legit, or just more internet nonsense floating around?

Hey everyone!
Sorry for the long post—I can't really do "short" without losing the nuance, so if you aren't looking to help, feel free to skip this so you don't waste your time.
I’ve been scrolling through the threads here and, predictably, found plenty of conflicting advice. Even my future accountant is scratching his head.
The gist: I’ve drafted an innovative business plan. I want to pull the trigger and actually start doing this. I can handle most of the workload myself alongside some sales reps. I’ve been in my current field for 11 years, pulling an average salary, and all my taxes are fully paid up. I have zero intention—at least not anytime soon—of quitting my day job. My sales guys are also fully employed elsewhere; they’d just be working for commission based on results :=)
So here’s the dilemma: Sole Proprietorship or LLC? Honestly, a sole proprietorship feels way more practical for me right now, whereas an LLC seems like a massive headache of paperwork and complexity. But there’s a catch—if this plan actually takes off, my business could see assets worth $500 $0.00 annually and revenue hitting $750 $0.00 per year. If things go big, aren't those numbers too high for a simple sole proprietorship? Wouldn't I end up getting crushed by higher tax brackets? From that angle, an LLC makes more sense. But then we hit the "what if" factor. What if the plan fails? What happens during the startup phase?
My accountant insists that with an LLC, I’ll need to hire an employee (though I see people on this forum are split on that). I have no idea how long it'll take to get this moving—it could be weeks, months, or even years. Having a full-time employee with zero output would basically bleed my initial investment dry in a few months, leaving $26 $0.00 gone forever.
Sure, if I hit those massive numbers, hiring someone isn't an issue—at that point, I'd probably need a secretary and an assistant anyway. But if the plan only hits 10% of its target—maybe $50 $0.00 in assets and $75 $0.00 in revenue—I’ll barely cover basic costs, let alone a payroll.
A third option is starting as a sole proprietor and then converting to an LLC later if needed. There’s a lot of chatter about this on the forum, but I haven't found any clear info on what that actually costs (someone mentioned you’d have to sell off all assets and buy them back under the new entity, liquidate the old one, and pay taxes on everything—which sounds totally absurd).

To wrap this up: the plan could be a goldmine, or it could be a dud. For the first year, I’m just relying on my own labor (alongside my main job) and the sales reps working on commission (on top of their regular jobs). I have my salary savings and an extra $20 $0.00 set aside. So, what’s the move? Should I go with a sole proprietorship or an LLC?

nimblepuma47 said:Hey everyone!
Sorry for the long post—I can't really do "short" without losing the nuance, so if you aren't looking to help, feel free to skip this so you don't waste your time.
I’ve been scrolling through the threads here and, predictably, found plenty of conflicting advice. Even my future accountant is scratching his head.
The gist: I’ve drafted an innovative business plan. I want to pull the trigger and actually start doing this. I can handle most of the workload myself alongside some sales reps. I’ve been in my current field for 11 years, pulling an average salary, and all my taxes are fully paid up. I have zero intention—at least not anytime soon—of quitting my day job. My sales guys are also fully employed elsewhere; they’d just be working for commission based on results :=)
So here’s the dilemma: Sole Proprietorship or LLC? Honestly, a sole proprietorship feels way more practical for me right now, whereas an LLC seems like a massive headache of paperwork and complexity. But there’s a catch—if this plan actually takes off, my business could see assets worth $500 $0.00 annually and revenue hitting $750 $0.00 per year. If things go big, aren't those numbers too high for a simple sole proprietorship? Wouldn't I end up getting crushed by higher tax brackets? From that angle, an LLC makes more sense. But then we hit the "what if" factor. What if the plan fails? What happens during the startup phase?
My accountant insists that with an LLC, I’ll need to hire an employee (though I see people on this forum are split on that). I have no idea how long it'll take to get this moving—it could be weeks, months, or even years. Having a full-time employee with zero output would basically bleed my initial investment dry in a few months, leaving $26 $0.00 gone forever.
Sure, if I hit those massive numbers, hiring someone isn't an issue—at that point, I'd probably need a secretary and an assistant anyway. But if the plan only hits 10% of its target—maybe $50 $0.00 in assets and $75 $0.00 in revenue—I’ll barely cover basic costs, let alone a payroll.
A third option is starting as a sole proprietor and then converting to an LLC later if needed. There’s a lot of chatter about this on the forum, but I haven't found any clear info on what that actually costs (someone mentioned you’d have to sell off all assets and buy them back under the new entity, liquidate the old one, and pay taxes on everything—which sounds totally absurd).

To wrap this up: the plan could be a goldmine, or it could be a dud. For the first year, I’m just relying on my own labor (alongside my main job) and the sales reps working on commission (on top of their regular jobs). I have my salary savings and an extra $20 $0.00 set aside. So, what’s the move? Should I go with a sole proprietorship or an LLC?

You could always start as a Sole Proprietorship and then "transition" to an LLC later.
If the amounts involved aren't massive and you don't need to limit your personal liability, a Sole Proprietorship is perfectly fine. Plus, you can often benefit from simpler tax structures regarding sales tax depending on your state's cash accounting rules.
However, once you're dealing with larger sums and higher risks, an LLC is highly recommended—both for the lower tax rates and for protecting your personal assets.
As for the director requirement, as long as you have social security or other benefits being paid through some means, an LLC doesn't necessarily require you to have "employees" on the books if you already have a full-time job elsewhere.

Thomas Ortiz3 said:You could always start as a Sole Proprietorship and then "transition" to an LLC later.
If the amounts involved aren't massive and you don't need to limit your personal liability, a Sole Proprietorship is perfectly fine. Plus, you can often benefit from simpler tax structures regarding sales tax depending on your state's cash accounting rules.
However, once you're dealing with larger sums and higher risks, an LLC is highly recommended—both for the lower tax rates and for protecting your personal assets.
As for the director requirement, as long as you have social security or other benefits being paid through some means, an LLC doesn't necessarily require you to have "employees" on the books if you already have a full-time job elsewhere.

Does anyone actually know—because I’ve searched everywhere and come up empty—what the actual costs are for switching from a sole proprietorship to an LLC? Do you seriously have to sell off all your business assets to the LLC and get hit with both sales and purchase taxes—like some people on this forum are claiming—or is there a more "elegant" way to handle it?